Saudi Aramco and ADNOC: Logistics and Operations in Indian Oil and Gas

This report provides an in-depth analysis of logistics and operations within the oil and gas sector, specifically focusing on the Indian market and the involvement of Saudi Aramco and ADNOC. The report begins with an introduction to the importance of logistics and operations management in business success, highlighting the challenges and opportunities within the Indian oil and gas industry. It then delves into a brief analysis of the organization, target market, and logistics activities, identifying key challenges faced by companies like Saudi Aramco and ADNOC. The report continues by outlining service propositions of competitors like BPCL and Castrol, and demonstrates opportunities for understanding awareness that are needed to carefully design and well-integrated products and service packages. Furthermore, the report examines the products offered by Saudi Aramco and ADNOC in India, along with their supply chain configurations and coordination activities and tools. The report also discusses human behavioral issues that staff employed in the Indian downstream Oil and Gas sector, providing a comprehensive overview of the logistics and operations landscape within the Indian oil and gas market.

Logistic and Operations for
Oil and Gas

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Question 1...................................................................................................................................1
Brief analysis of the organisation with target market and Indian downstream oil and gas
market to identify logistics and operations activities..................................................................1
Question 2 ..................................................................................................................................3
Outline service proposition of 1 or 2 of the identified competitors in the Indian Downstream
O&G market................................................................................................................................3
Demonstrate opportunities of understanding towards awareness that need to take carefully
design and well integrated products and service package...........................................................3
Question 3 1 or 2 products offered by Saudi Aramco & ADNOC in India and how these
products supply chain configured and coordinated ....................................................................4
Coordination activities and tools that are needed for efficient operations in terms of several
elements.......................................................................................................................................5
Question 4...................................................................................................................................5
discuss human behavioural issues that staff employed in the Indian downstream Oil and Gas
sector...........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Logistic and operations management is one of the important consideration which play
vital role in business success. It is the control of flow and storage of particular goods in the
business. With the help of logistic activities' visibility also creating that contain supply chain in
effective manner (Diaz and de Gracia, 2017). Present study based on Saudi Aramco which is one
of the largest oil producer. They are also dealing in Indian companies as retail and refine
petrochemicals projects. In order to look towards Indian market, it can be stated that key
opportunities associated with several challenges that are face by India oil and gas industry.
Downfall in oil prices creating uncertainty on future of India industry growth. Therefore, it can
be stated that details information can be looks for reducing problems of O&G company.
Nowadays, they want to expand operations and functions in Indian market in
Maharashtra. Hence, present study assists to focus on potential logistic and operations
management challenges that create impact on business. Furthermore, it includes services as
opposed to products and show Indian downstream O&G market.
MAIN BODY
Question 1
Brief analysis of the organisation with target market and Indian downstream oil and gas market
to identify logistics and operations activities
In order to looks for logistics and operations in oil and gas market, it can be stated that
there are several activities has been undertaken that create several challenges in the selected
enterprise. Following are these challenges face by Indian O&G industry so that they need to
focus on potential competitors who are doing well. In India, there are several competitors of
Saudi Aramco & ADNOC such as Reliance Industries Limited, Indian Oil, ONGC, etc. ONGC
works on 11th rank among global energy majors. It is public sector Indian business which feature
in all companies list (Domnikov, Chebotareva and Khodorovsky, 2015). Planning and control: In order to enter in India's Oil and Gas market, it is important to
focus on retail sector business which consider threshold investment of at least Rs. 20
billion. PM Narendra Modi also assured with smooth acquisition of land so that they are
expect issues that must be sorted and create positive impact on Maharashtra. In India, it is
one of the major challenge to regulate effective functioning. In the country, oil and gas
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are demanded for commercial and domestic purposes. Therefore, products are used for
lots of purposes that are ranging from driving machineries which produce plastics and
fertilizers (Shvarts, Pakhalov and Knizhnikov, 2016). Inventory and capacity management: Upstream sector of the oil and gas industry
includes processes which includes searching for and recovery of crude oil in production.
Inventory and capacity management includes intensive and extensive efforts that are
made towards ascertaining actual places where it is located. Exploration is very difficult
process so that appropriate functioning will be successfully develop to focus on
appropriate requirement of products (Shukla and Karki, 2016). In the country, there is no
appropriate management of inventory and capacity management so that it create impact
on oil and gas industry. Furthermore, discover new grounds in oil is also located which
take advantages of different operations which helps to search prospective in oil and gas
fields. Layout design: In India, layout design is important aspect that assists to focus on main
process and effective consideration. With this regard, it can be said that layout design is
also important element on which Oil and Gas company need to focus. When Saudi
Aramco & ADNOC join hands for petroleum retail in India, they are facing issue and
challenge regarding layout. Therefore, it also one of the major challenge in front of the
chosen enterprise (Bergh, Hinna and Jain, 2014). Furthermore, Saudi Arabia is also
expected to supply at least 50% crude oil which is required and provide advance
technology. When it is ready, refinery will process 1.2 million barrels crude oil per day to
produce more effective results.
 Health and safety or quality management: Another challenge that face by O&G industry
of India is health and safety or quality management. Furthermore, it is essential to look
upon appropriate functioning of health and safety concerns that need to be manage
appropriate system at workplace. On the basis of quality management work, O&G
company of Saudi Arabia need to take attention towards effective working. Saudi
Aramco & ADNOC working with three oil marketing firms such as Indian Oil
Corporation, Bharat Petroleum and Hindustan Petroleum Corporation. All these are major
industry of the country so that foreign company can easily establish their work to focus
on quality management (Toner, Andrée Wiltens and Copeland, 2017).
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Question 2
Outline service proposition of 1 or 2 of the identified competitors in the Indian Downstream
O&G market
In India, there are several competitors of Saudi Aramco & ADNOC, from which Bharat
Petroleum Corporation Limited (BPCL) is an Indian State controlled Oil and Gas company. It
has headquartered in Mumbai, Maharashtra. This corporation operates with two large refineries
in the country that is located in two big places. Products range includes petroleum, natural gas
and other petrochemicals. It is one of the top oil and gas companies in India. It contains four
refiners such as Mumbai refinery, Kochi refineries, Bina refinery and Numaligarh refinery.
Furthermore, Castrol India Limited is an automotive and industrial lubricant
manufacturing company. Castrol India is one of the largest manufacturer of automotive and
industrial lubricants in the market. There are around 48% market share in the country so that
wide range of products are also provided such as corrosion preventives in which Castrol
metalworking fluids and cleaners. Furthermore, in oils they are also deals so that they focusing
on cylinder oils cross head, crane case oils, truck piston, compressor oils, refrigeration oils, gear
oils, etc. Both the organisation of Oil and Gas company's are major competitors who exists in the
Indian Downstream market (Rui, Peng and Zhou, 2017).
Demonstrate opportunities of understanding towards awareness that need to take carefully design
and well integrated products and service package
In India, there are several opportunities exists that assists to create more awareness and
understand taking carefully design that is well integrated several products and service packages.
In the country, oil and gas sector is one of the core from all industries so that it play major role to
make decisions and consider several other important sections in the economy. Economic growth
of India is closely related with energy demand so that it assists to consider investment procedure
and several policies to fulfil increasing demand of the products (Sefair, Méndez and Zuluaga,
2017). Government also allow 100% FDI in different segments of the sector so that Saudi
Aramco & ADNOC can easily develop their functions with three companies such as Indian Oil
Corporation, Bharat Petroleum and Hindustan Petroleum Corporation. India is expected to be
one of the largest contributors in non-OECD petroleum consumption growth globally. Oil
imports also sharply increases so that country retained its spot as the third largest consumer of oil
in the world in 2017.
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In addition to this, India is expected to be one of the largest contributor so that on forth
the largest level that increases consumption of 4.69 mbpd of oil in 2017 compared to 4.56 mbpd
in 2016. There are several investments also made that contain released data by the particular
department of Industrial Policy and Promotion. In the particular sector petroleum and natural gas
sector attracted with FDI so that oil and gas sector continuously increases positive results. Saudi
Aramco & ADNOC is world largest oil exporter which contain planning to invest in refineries
and petrochemicals in India. Hence, strategic partnership with the country also successfully
develop results and performances. Foreign investors also possess opportunities to invest project
so that country will get several benefits for positive program.
Question 3 1 or 2 products offered by Saudi Aramco & ADNOC in India and how these products
supply chain configured and coordinated
Saudi Aramco & ADNOC signed framework agreement to explore opportunities for
collaboration in the Natural Gas and Liquefied Natural Gas sector. Cooperation brings together
two of the world's leading energy producers from Arabian Gulf so that they are working jointly
in an area of strategic importance for both companies. Therefore, they seek to boost more
revenue from natural gas and LNG. Saudi Aramco & ADNOC signed an MoU and build
integrated refinery and petrochemicals complex at Ratnagiri in Maharashtra. Project will be
implemented and working between Saudi Aramco president and CEO Amin H. Nasser. Along
with this,Saudi Aramco joined project with signing on Indian consortium with sidelines 16
International Energy Forum Ministerial. RRPCL promoted in the country and consist IOCL,
BPCL and HPCL with overseas strategic partners.
In the country project is also set up 50:50 joint partnership between Saudi Aramco &
ADNOC and India. It can be consider as the largest overseas investment in the Indian refining
sector. Strategic partnership also brings together crude supply, resources, technologies,
experience and expertise. Multiple oil companies also consider commercial presence in the world
so that mega refinery also capable of processing 1.2 million barrel of crude oil each day. There
are several kinds of refined petroleum products consider which includes diesel, petrol, etc. In
addition to this, it is also provides feedstock with integrated petrochemicals complex. Capacity to
produce oil is around 18 million tonnes per annum. RRPCL also rank among the world's largest
refining and petrochemicals projects. Therefore, it can be designed to meet with fast growing
fuel and fulfil petrochemicals demand. Project cost is also estimated on around Rs. 3 lakh crore.
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Ratnagiri refinery and petrochemicals formed their work on 22nd September 2017 with
IOCL, BPCL & HPCL with equity participation. It is implemented integrated refinery &
petrochemicals project. Hence, it is expected that estimated cost is around Rs. 3,00,000.
Coordination activities and tools that are needed for efficient operations in terms of several
elements
In order to take coordination with India, strategic business investment taken which is
world's fastest growing oil consumer which reached an irresistible. As a result, it can be said that
Aramco had time of signing original agreement with 50% stake planned project. Therefore, it can
be stated that bring a partner at later date not just refining oil in selling downstream products.
Saudi Aramco & ADNOC taken further step and provide support with investment that is large
fully integrated oil business in the country. It also covers entire value chain in partnership and
local businesses (ADNOC joins Saudi Aramco to take stake in $44 billion Ratana, 2018). These
local businesses are very well known about the market so that they are agreed with this
statement. ADNOC and Aramco consider their project with India on 50% and it is discussed
among two partners. Hence, it can be stated that Aramco is to supply half of crude oil to process
refinery and it also customised by 2025. ADNOC also supply crude that process appropriate unit.
With demand of oil, there are almost doubling 10 million barrels per day by 2040. India
access adequate, affordable oil which is more important. As per Dharmendra Pradhan Oil
minister, Saudi Arabia always trusted and reliable suppliers of crude oil in India and it is one of
the key element of India's energy security (Sefair, Méndez and Zuluaga, 2017). As per other
major producers, both are looking to lock in customers in world's third largest oil consumer with
investment. Kuwait is also looking to investment in project and return to get assured and off take
of their crude oil.
Question 4
discuss human behavioural issues that staff employed in the Indian downstream Oil and Gas
sector.
In Saudi Aramco company, they must take into consideration employee's well being as it
has been increasing up the agenda for employers in UK. Furthermore, a major aspect of this is
the mental health of staff members. The company relies on having a healthy and productive
workforce in order to expand its operations in Indian market. The UK has created significant
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progress in opening up conversations around mental health and well-being. Moreover, the
company also keep in mind that workplace mental health and well being is an important issue
which workers have a moral as well as economic reason to address. Human behavioural issues
that staff employed in the Indian downstream Oil and Gas sector consist of the lots of challenges
that are faced by them. Apart from this, in Indian downstream errors by employees is blamed for
all forms of accidents that occur in the company (Mendes, Hall, Matos and Silvestre, 2014).
Company adopts various technologies to support its employees and workers from these kinds of
accidents. Workers encounter risks with a logical mind that informs them to check the facts on
the side of the safety. In any oil refinery system, this means that an individual might continue
hooking up a hose even though it looks frayed. Here are some recommendations for Saudi
Aramco company for practising for improving behaviour based safety of employees:
 The company must begin with consulting from experts that tell energy companies that
safety is an observational procedure. This states that supervisors must constant watch and
nitpicking. If company over-supervise on them, the refinery employees will resent the
firm that does this and create even worse behaviour.
 Company must not add penalties; which means that they should go positive not negative.
Never penalise employees for their mistakes, rather rewards must be provided to them for
hitting the achievements of objectives. Further, hold the positive reinforcement that
makes an upbeat attitude towards safety.
 In addition, company must also keep in mind that don't just concentrate on hourly
workers. Modifications and improvements comes from the top and try to hold company's
officers just as responsible as everyone else is.
 Saudi Aramco company must also, allow the power of technology to reshape worker's
behaviour in a positive way. Unlike old techniques that took one to two years to
demonstrate significant outcomes, new applications and software can assist launch
behavioural changes within days of application.
CONCLUSION
From the above report, it can be stated that logistic and operations management consider
important functioning in O&G company. In this regard, different consideration must be taken
and focused with Saudi Aramco & ADNOC which expanded operations in India to work with
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partnership and consider activities among several businesses. In this regard, it can be stated that
report summarised about different challenges that faced by the enterprise to work in India.
Furthermore, it articulated about cooperation between India and other country to expand business
and work for major perspective. It assists to focus on import and export activities of the country.
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REFERENCES
Books and Journals
Bergh, L.I.V., Hinna, S. and Jain, A., 2014. Developing a performance indicator for
psychosocial risk in the oil and gas industry. Safety science. 62. pp.98-106.
Diaz, E.M. and de Gracia, F.P., 2017. Oil price shocks and stock returns of oil and gas
corporations. Finance Research Letters. 20. pp.75-80.
Domnikov, A., Chebotareva, G. and Khodorovsky, M., 2015. Risk-oriented approach to long-
term sustainability management for oil and gas companies in the course of
implementation of investment projects. WIT Transactions on Ecology and the
Environment. 192. pp.275-284.
Rui, Z., Peng, F. and Zhou, X., 2017. Investigation into the performance of oil and gas projects.
Journal of Natural Gas Science and Engineering. 38. pp.12-20.
Sefair, J.A., Méndez, C.Y. and Zuluaga, L.F., 2017. Linear solution schemes for Mean-
SemiVariance Project portfolio selection problems: An application in the oil and gas
industry. Omega. 68. pp.39-48.
Shukla, A. and Karki, H., 2016. Application of robotics in offshore oil and gas industry—A
review Part II. Robotics and Autonomous Systems. 75. pp.508-524.
Shvarts, E.A., Pakhalov, A.M. and Knizhnikov, A.Y., 2016. Assessment of environmental
responsibility of oil and gas companies in Russia: the rating method. Journal of cleaner
production. 127. pp.143-151.
Toner, S., Andrée Wiltens, D.H. and Copeland, R., 2017. Medical evacuations in the oil and gas
industry: a retrospective review with implications for future evacuation and preventative
strategies. Journal of travel medicine. 24(3). p.taw095.
Mendes, P. A., Hall, J., Matos, S. and Silvestre, B., 2014. Reforming Brazil׳ s offshore oil and
gas safety regulatory framework: Lessons from Norway, the United Kingdom and the
United States. Energy Policy.74. pp.443-453.
Online
ADNOC joins Saudi Aramco to take stake in $44 billion Ratana. 2018.
[Online] Available through: <https://timesofindia.indiatimes.com/business/india-
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business/abu-dhabi-oil-giant-signs-pact-to-take-stake-in-ratnagiri-refinery-project/
articleshow/64730180.cms>.
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